The Minnesota Legislature wants to make more money from the state’s School Trust Lands. Separate bills in the House and Senate forward proposals ranging from the creation of a new agency to manage the lands to reforming the existing DNR management in order improve economic returns. The revenue derived from the lands go to the Permanent School Trust.
What the Legislature does or doesn’t do with trust lands is especially important to people who live, recreate or derive a living from the land in northern Minnesota. Currently, the use of this land for activities ranging from hiking to hunting to logging is taken for granted. Some of the current proposals in the Legislature may alter that status quo. For instance, hunters and others may find themselves paying an access fee to use trust lands.
About the only way you can identify trust lands is with a plat book, because they’re not marked with signs or property boundaries. Looking at a map, you’ll see trust lands intermingled within a patchwork of public ownership that includes state forests, county tax-forfeited land and national forests. Seven northern counties contain 100,000 acres or more of trust land, ranging from Cook County with 121,000 acres to Koochiching County with 850,000 acres.
Mineral leases, mostly on the Iron Range, are the primary source of trust land revenue. Although much of the land is forested, logging is less lucrative than mining. The DNR’s administrative costs eat up about 80 percent of timber sale proceeds, so only 20 percent is returned to the Permanent School Trust. Some legislators criticize the DNR’s high costs and propose creating a new bureaucracy to manage trust lands. Others are calling for more accountability from the DNR.
At the March 21 meeting of the Minnesota Forest Resources Council in New Brighton, member Gene Merriam briefed the Council, of which I am a member, on the school trust lands issue. Merriam has a unique perspective on the topic. Currently, he serves on the Permanent School Trust Advisory Committee, but he is also a former Minnesota DNR commissioner and a former state senator.
He began with a history lesson. When Minnesota became a state, the federal government granted two square miles in every township, Sections 16 and 36, for schools. A Permanent School Trust was established in the State Constitution for revenues derived from the lands. Today the trust lands comprise about 2.5 million acres mostly in the forested north. Lands suitable for farming were sold years ago.
Merriam said over the years, the management of trust lands for revenue suffered from benign neglect. When he was in the Legislature, school trust revenue was simply used to reduce the General Fund expenditure for education. No one talked about managing the lands for maximum revenue generation.
About four or five years ago, the Legislature changed the visibility of school trust revenue by putting it on the top of the school aid formula and showing how much was available per pupil across the state. Trust revenues average about $25 million annually, but Merriam said education expenditures total in the billions. Still, when education budgets are being cut, the trust land revenue becomes noticeable and important.
In Minnesota, not all trust lands can produce revenue. They are located in state parks or scientific and natural areas, and even include 86,000 acres within the Boundary Waters Canoe Area Wilderness. The state statute guiding trust land management has a goal of producing maximum economic return while following sound conservation principals. In parks and wilderness areas, the underlying conservation principles preclude managing for economic return.
When Merriam was DNR commissioner, he began getting trust lands out of state parks, a task which continues today. In the Boundary Waters, the federal government is currently negotiating a combination purchase and exchange for state and county lands. The state would receive national forest lands where logging and mining may occur as a swap for some of its wilderness holdings. The federal government also will purchase some of the state land, with proceeds going to the Permanent School Trust.
The land-and-cash deal isn’t good enough for some legislators, who are demanding a land-for-land exchange, thus freeing up more land outside of the Boundary Waters for development. Environmentalists, on the other hand, want a complete purchase of state lands to minimize development, especially new mining ventures. Either all-or-nothing position is likely to deep-six the current exchange efforts. Ironically, the Minnesota has tried to make a Boundary Waters land swap since the area was declared wilderness 35 years ago. The current process is the closest the state has come to succeeding.
Merriam said three schools of thought exist regarding future trust land management. The first is to create a new management entity and take the management away from the DNR. The second is to leave management with the DNR, but to create an advisory committee to provide oversight and ensure the DNR manages the lands for maximum economic return. The third option is a recent DNR commissioner’s order which creates a new staff position to ensure the agency maximizes revenue opportunities.
The differences in these schools of thought are apparent in legislation emerging from the House and Senate. House File 2224 calls for creating a new board to manage trust lands and passed overwhelmingly on the House floor. It will also make big changes to the way Minnesotans recreate on public lands by charging fees to access trust lands for hunting, trails, or other public uses. The fees could be tacked on as a surcharge on existing licenses and permits.
Merriam was not up to speed on Senate legislation, so another council member, Wayne Brandt, gave a brief update. The Senate is taking a more deliberate approach and is attempting to deal with specific issues. While Senate File 1889 calls for a new oversight commission, management authority would remain with the DNR. However, the agency would be directed to certify its costs and the Legislative Auditor would provide a benchmark cost comparison with management costs on other public land.
The Senate language also resolves the conflict between sound resource management principles and maximizing economic return. Where there is conflict, the DNR would be directed to resolve it for the long-term revenues. Where the land’s designation prohibits economic return, such as in a state park, the trust would be compensated. The bill sets a 2016 deadline for this process to allow time for the compensation to be included in legislative appropriations.
Conflicts between the House and Senate bills need to be resolved in a conference committee. The resulting legislation must then be signed by the Governor to become law. Whether all of this will occur before the Session ends is uncertain. If not, we can count on the trust land issue continuing to percolate in the Legislature next year.